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Don’t Expect Big Savings on Care for “Dual Eligibles,” New Study Suggests

We recently cautioned policymakers that trying to shrink deficits by moving everyone who receives both Medicare and Medicaid into state-run managed care plans — and capping funding for their care below what it would otherwise be — risks harming this extremely vulnerable group.  A new Kaiser Family Foundation study similarly stresses the need for caution.

The 9 million “dual eligibles” — all of them seniors or people with disabilities — are poorer and sicker than Medicare and Medicaid beneficiaries as a whole, so they are costlier to cover.  Experts agree that we should try to find ways to better coordinate Medicaid services with those of Medicare.  But the Kaiser study finds that initiatives to date have had only limited success in improving care and cutting costs.

“[G]enerating modest Medicare savings and potentially better outcomes for dually eligible beneficiaries may be achievable,” the Kaiser researchers conclude, “but will require tailoring, targeting, and monitoring.”  For example, it will require using different approaches for different subgroups of dual eligibles.

As we wrote, acting now to require all dual eligibles to enroll in untested managed care plans and capping federal funding could lead to cuts in health services that would grow over time.  Given that many dual eligibles rely on long-term care services and supports, this could mean significant cuts to nursing home care and in-home services, among others.

Instead, policymakers should await the results of demonstration projects scheduled to start next year under health reform that will test new models of coordinating care for dual eligibles.